EPA Revises Nationwide Waiver for Buy American Provision for Water Infrastructure Projects Financed Through ARRA EPA announced in the August 10, 2009 Federal Registerthat it is revising the nationwide waiver of Section 1605 (Buy American Requirement) of American Recovery and Reinvestment Act of 2009 (ARRA) for de minimis incidental components of eligible water infrastructure projects where such components cumulatively comprise no more than a total of 5 percent of the total cost of the materials used and incorporated into a project. This action revises the terms under which incidental components qualify for coverage under the public interest de minimis waiver signed and effective on May 22, 2009, and permits the use of non-domestic iron, steel, and manufactured goods when they occur in de minimis incidental components of such projects funded by ARRA that may otherwise be prohibited under section 1605(a). The effective date of this notice is July 24, 2009.

Water infrastructure projects typically contain a relatively small number of high-cost components incorporated into the project that are iron, steel, and manufactured goods, such as pipe, tanks, pumps, motors, instrumentation and control equipment, treatment process equipment, and relevant materials to build structures for such facilities as treatment plants, pumping stations, pipe networks, etc. In bid solicitations for a project, these high-cost components are generally described in detail via project specific technical specifications. For these major components, utility owners and their contractors are generally familiar with the conditions of availability, the potential alternatives for each detailed specification, the approximate cost, and the country of manufacture of the available components.

Every water infrastructure project also involves the use of literally thousands of miscellaneous, generally low-cost components that are essential for, but incidental to, the construction and are incorporated into the physical structure of the project, such as nuts, bolts, other fasteners, tubing, gaskets, etc. For many of these incidental components, the country of manufacture and the availability of alternatives is not always readily or reasonably identifiable prior to procurement in the normal course of business; for other incidental components, the country of manufacture may be known but the miscellaneous character in conjunction with the low cost, individually and (in total) as typically procured in bulk, mark them as properly incidental.

According to the Federal Register notice, assistance recipients who wish to use this waiver should, in consultation with their contractors, determine the items to be covered by this waiver, must retain relevant documentation as to those items in their project files, and must summarize in reports to the State the types and/or categories of items to which this waiver is applied, the total cost of incidental components covered by the waiver for each type or category, and the calculations by which they determined the total cost of materials used in and incorporated into the project.

WEF and AWWA Issue Joint Statement Concerning EPA Buy America Guidance under American Recovery and Reinvestment Act (posted 6-16-09)The Water Environment Federation (WEF) and American Water Works Association (AWWA) issued the following joint statement on June 16 regarding the Buy American provision contained in the American Recovery and Reinvestment Act (ARRA). The ARRA’s Buy American provisions requires recipients of stimulus funds through the Clean Water State Revolving Loan Fund (CWSRF) or the Drinking Water State Revolving Loan Fund (DWSRF) to use domestic iron and steel and manufactured goods that are produced in the United States. The law provides for waiver of this provision under several limited circumstances. Several companies and organizations have offered interpretations of the Buy American provisions as part of educational, promotional, or other outreach. AWWA and WEF members are cautioned that the only official guidance on the application of Buy American provisions is that published by US EPA. June 16 joint WEF-AWWA Statement (pdf).

WEF and AWWA members are urged to rely upon this official guidance in making decisions about procurement or contracting for projects funded by the stimulus bill.

EPA Announces Waivers for Buy American Requirements For Specific State Revolving Funds Projects (Posted 6-4-09)EPA announced in the June 2 Federal Register a notice of a nationwide waiver for the Buy American provision of the American Recovery and Reinvestment Act of 2009 (ARRA). This requirement is for projects using the $6 billion in stimulus funds allocated through the clean water and drinking water state revolving funds. The first waiver is for projects that had started on soliciting bids on or after October 1, 2008 and prior to the enactment of the ARRA on February 17, 2009 if the bids were solicited in a reasonable anticipation of obtaining funding.. The basis for this nationwide waiver is the requirement in the SRF appropriations heading of ARRA Title VII for giving priority to those projects that are ready to proceed to construction within 12 months of the enactment of ARRA. The second waiver is for de minimis components of projects eligible for state revolving fund assistance and defined as imported components making up no more than 5 percent of the total cost of materials used in a project. In April EPA issued a waiver for projects that had been financed between Oct. 1, 2008, and Feb. 17 so they could obtain refinancing under the Recovery Act. The effective date of the notice is May 22, 2009. View the June 2 Federal Register notice.

EPA Issues New Guidance for Implementation of ARRA SRF Projects(Posted 4-28-09)EPA’s Office of Water issued an updated guidance memorandum to regional water management division directors on April 28, 2009 to implement the American Recovery and Reinvestment Act of 2009 (ARRA) requirements for clean water and drinking water state revolving funds (SRF) loan programs. The guidance includes definitions to better determine the interpretation and implementation of the Buy American provisions of ARRA, particularly as they related to use of American made iron, steel, and manufactured goods in the construction of a project. Implementation requirements for Buy American waivers include step-by-step process requirements for SRF applicants along with worksheets for such waivers, and foreign and domestic construction materials price comparisons. The guidance also includes an explanation of how EPA will issue national waivers in certain situations and sample Buy American contract language and certification. EPA plans to announce the availability of the guidance in an upcoming Federal Register. View the EPA April 28, 2009 ARRA Implementation Guidance.

Obama 2010 Budget Proposes $3.9 Billion for EPA Water Revolving Loan Programs (updated 3/3/09)The President’s budget outline for FY 2010 released February 26 proposes $10.5 billion total funding for EPA, which the Office of Management and Budget (OMB) says is a 34-percent increase over the level that is likely to be approved by Congress as part of the FY 2009 Omnibus appropriations bill that passed the House on February 25. Congress is expected to approve the FY 2009 Omnibus by March 6, and will take up 2010 spending proposals in the weeks after that. The EPA section of the FY 2010 budget outline is available here (pdf). The complete budget document is available on the OMB web site at: http://www.whitehouse.gov/omb/budget/

The total includes $3.9 billion for the Clean Water and Drinking Water State Revolving Funds, $475 million for a new Environmental Protection Agency-led, interagency Great Lakes restoration initiative, and $3.9 billion for core EPA operating activities, such as research, enforcement, and regulatory development.

The language in the budget outline states that the Administration will also support “program reforms” that will put the clean water and drinking water SRF on a “firmer foundation” and will “work with State and local partners to develop a sustainability policy including management and pricing for future infrastructure funded through SRFs to encourage conservation and to provide adequate long-term funding for future capital needs.”

In addition to the increases for the EPA water revolving funds, the budget outline proposes $5 billion per year for a new National Infrastructure Bank designed to deliver funding to priority projects with “significant national or regional economic benefit.” According to the budget document, this new entity will “not only provide direct Federal investment but also to help foster coordination through State, municipal, and private co-investment.”

Stimulus Program Includes $7 Billion for Water Infrastructure (updated 3/2/09)The House and Senate approved HR 1, the American Recovery and Reinvestment Act, on February 13. President Obama signed the legislation on February 17. Public Law 111-5 provides for significant emergency funding for public works infrastructure as part of a $787 billion package of spending and tax cuts. The package includes over $7 billion for drinking water and wastewater projects. The EPA clean water and drinking water state revolving fund (SRF) programs will receive $6 billion, including $4 billion for the clean water SRF and $2 billion for the drinking water SRF. In addition, the USDA Rural Water and Waste Disposal program will receive $1.38 billion for loans and grants.